Lawyers To Help You Through Marital Property Issues
When spouses file for divorce in North Carolina, financial assets and debt will be subject to valuation and classification as either marital property or separate property. In most cases, any assets or debt accumulated over the duration of the marriage will be classified as marital property and subject to the state's equitable distribution laws. Some exclusions might be inheritances by either spouse or assets maintained as separate property (not commingled) and protected by a premarital agreement or postnuptial contract.
Having an experienced lawyer on your side can be the most important step in negotiating a fair property settlement during your period of separation and for your final divorce judgment. As soon as you realize you are facing divorce, call us at 704-376-1066 .
Equitable Distribution Does Not Necessarily Mean A 50-50 Split
It is a common misperception that "equitable distribution" means splitting assets and debt right down the middle, dollar-for-dollar. The term really means that marital property and divisible property is distributed by the court according to principles of fairness. During the period of legal separation prior to the final divorce decree, the spouses will have the opportunity to negotiate a fair separation property settlement. One party may decide that keeping the house is a fair trade for the future pension annuity, for example. The separation property settlement is a legally binding enforceable agreement right up until the final divorce judgment. However, it does not necessarily have to be the final property judgment. Parties may revise the terms of the temporary agreement or take it to court to fight for different terms.
Classifications Of Property
The courts recognize three classifications of property when making decisions regarding the equitable distribution of property. These are:
- Marital property: In general, this is all property obtained during the course of the marriage. The court will look at a list of factors, including but not limited to: length of marriage, efforts made by each spouse to acquire property, and the incomes of each party.
- Separate property: This is all property brought to the marriage by a party and all property received by one party by gift or inheritance.
- Divisible property: This represents all property interests obtained between the date of separation and the date of distribution.
Elements Of Equitable Distribution
When filing for divorce, the parties must decide how they are going to settle on a fair division of property under North Carolina equitable distribution laws. Options include:
- Marriage: The husband or wife may claim property as part of the divorce filing.
- Legal separation: Spouses who are living separate and apart from each other may file a claim.
- Court decision: The court's task is to determine the marital and divisible property and to provide for an equitable distribution of the marital and divisible property between the parties.
- Claim asserted before judgment of absolute divorce: Except for certain limited exceptions, an absolute divorce within North Carolina destroys the right of a spouse to equitable distribution, unless the right is asserted prior to judgment of absolute divorce.
The Process Of Equitable Distribution
Equitable distribution can be broken down into a three-step process.
- Identification and classification: First the parties must identify all property and characterize it accordingly. This is the step in which it must be decided if the property is considered to be: separate, marital or divisible.
- Valuation: The next step is for the value of the assets and debts of the estate to be determined properly. Without a prior agreement, such as a premarital agreement, this step must be done in order for equitable distribution to be done accordingly.
- Distribution: Lastly, the property will then be equitably divided. There is a presumption in favor of an equal division; however, the court has great discretion in making an uneven distribution so long as at least one of the statutory factors affecting distribution is present. Some of those factors include: income, prior support obligations, financial and nonfinancial contributions to the marriage, value separate property, etc. N.C.G.S. ยง50-20(c)(1-12)
Active And Passive Appreciation/Depreciation Of Property
An asset that has been classified as mixed (part marital and part separate) may have appreciated or depreciated during the marriage. Active appreciation in the value of a separate asset during marriage is marital. Active appreciation is caused by the efforts of the spouse during the marriage and prior to the separation. Passive appreciation of a separate asset during the marriage is separate. Passive appreciation is caused by market forces outside the control of an owner, or is created by the action of someone or something other than the efforts of the spouse. Whether appreciation or depreciation is active or passive may make a substantial difference in the value of the marital estate.
Attorney's Fees With Equitable Distribution
The court will only award you attorney's fees in relation to your claim for equitable distribution if there are verified acts by the opposing party to waste, neglect, devalue or convert marital property during the period after separation and before the time of distribution. As always, this determination is at the discretion of the court.
Call Us To Talk To A Divorce Attorney About Division Of Marital Property
From our offices in Charlotte, we represent clients in county family law proceedings throughout central North Carolina. Call us at 704-376-1066 or contact us by email to explain your circumstances regarding equitable distribution of your marital property.